Trump Loses Golf Course Lawsuit

Donald Trump is involved in many lawsuits. He lost one of them. Mr. Trump purchased a golf course in 2012 ago for $5 million. That was a good price, but part of the deal was that he had to accept the liabilities then pending. Some 65 members were trying to withdraw from their membership. There was some $41 million owed to them as refundable deposits. Under the terms of their agreement, the resignation process was complicated and lengthy. It could take ten years to resign one’s membership. Mr. Trump named the golf course, Trump Golf Course. It is in Jupiter, Florida.

A couple of months after assuming control, Mr. Trump said if they wanted to resign, then they could not have access to the club. Yet, they were still required to pay dues of some $8,000 to $20,000 per year. The members then said well, if they were losing access to the course, then their resignation was final and they were entitled to a refund of their deposits. Mr. Trump’s company refused to issue refunds or to otherwise speed up the resignation process. The members filed a class action lawsuit, saying the new owners were unilaterally changing the terms of their agreement. Eric Trump was the operations person for the golf course and he admitted on the witness stand that paying dues without access to the club violated a fundamental principle of life. Donald Trump testified via videotaped deposition.

The trial was held in federal court last August. This week, the judge issued his ruling in favor of the members. He awarded the members $5.6 million for refunds of their dues and deposits. As always, Mr. Trump said he would appeal. See CBS news report.

But, Mr. Trump’s hardball business tactics did work well in one sense. During the four years of the lawsuit, about half the members changed their mind and withdrew from the resignation list. That saved him tens of millions in refunds he would have owed. See NPR news report. Whether these many lawsuits are good politics is beyond the scope of this blog. But, one must wonder.